Megacenter U.S. LLC v. Goodman Doral 88TH Court LLC, 3D18-519

• Decision Date: 24 April 2019
• Docket Number: No. 3D18-519,3D18-519
• Citation: 273 So.3d 1078
• Parties: MEGACENTER US LLC, etc., Appellant, v. GOODMAN DORAL 88TH COURT LLC, etc., Appellee.
• Court: Florida District Court of Appeals

273 So.3d 1078

MEGACENTER US LLC, etc., Appellant,

v.GOODMAN DORAL 88TH COURT LLC, etc., Appellee.

No. 3D18-519

District Court of Appeal of Florida, Third District.

Opinion filed April 24, 2019

Rehearing Denied May 9, 2019

Duane Morris, LLP, Alvin D. Lodish, and Richard D. Shane, Miami for appellant.

Weiss Serota Helfman Cole & Bierman, P.L. and Edward G. Guedes and Eric P. Hockman, Coral Gables for appellee.

Before EMAS, C.J., and SALTER, and FERNANDEZ, JJ.

PER CURIAM.

Megacenter US, LLC., ("Megacenter") appeals the trial court's order on Megacenter's motion for rehearing as to the trial court's corrected summary final judgment dated January 3, 2018, and corrected summary final judgment. On the issue of notice, we find that Florida law supports Megacenter's position that it substantially complied with the notice requirement in the subject Purchase and Sale Agreement. We find further that the purchase and sale agreement at issue in this case provided for automatic termination on the record presented. We thus reverse and remand for entry of summary judgment in Megacenter's favor.

On January 26, 2017, Goodman Doral 88th Court, LLC., ("Goodman"), the seller, entered into a contract with Megacenter, the purchaser, for the purchase of real property located in the City of Doral, Florida ("City"). Megacenter made a $ 250,000.00 initial deposit, as required by the parties' purchase and sale agreement ("Agreement"). The purchase price for the property was $ 10,500,000.00. Megacenter delivered the initial deposit to an escrow agent, as required by paragraph 3 of the Agreement.

Megacenter's intention was to use the property for a self-storage facility, so it notified Goodman of its intent. Megacenter let Goodman know that if the property could not be used as a self-storage facility, it would not purchase the property. When the parties entered into the Agreement, the parties did not know if the City's zoning allowed the property to be used as a self-storage facility. On March 10, 2017, Megacenter requested that the City issue Megacenter a zoning verification letter letting Megacenter know if the subject property could be used for this purpose.

In the Agreement between Goodman and Megacenter, the parties negotiated the provisions by which Megacenter could terminate the Agreement and recover its deposit. Paragraph 3 of the Agreement stated:

3. Deposit . To secure the performance of Purchaser's obligations under this Agreement, within two (2) Business Days after the Effective Date of this Agreement, Purchaser shall deliver by wire transfer to Chicago Title Insurance Company, as escrow agent ("Escrow Agent "), an initial deposit ("Initial Deposit ") in the amount of TWO HUNDRED FIFTY THOUSAND and 00/100 DOLLARS ($ 250,000.00), the proceeds of which shall be held in trust as an earnest money deposit by Escrow Agent, and disbursed only in accordance with the terms of this Agreement. On or before the expiration of the Inspection Period, if Purchaser does not terminate (or is not deemed to have terminated) this Agreement pursuant to the provisions hereof, Purchaser shall deliver to Escrow Agent, an additional deposit ("Additional Deposit ") in the amount of SEVEN HUNDRED FIFTY THOUSAND and 00/100 DOLLARS ($ 750,000.00).... In the event that Purchaser does not deliver the Additional Deposit to Escrow Agent on or before the expiration of the Inspection Period, the same shall be deemed a termination of this Agreement within the Inspection Period and the Agreement shall be terminated, whereupon all parties shall be released from all further obligations under this Agreement, except for obligations that expressly survive termination of this Agreement. The Initial Deposit and the Additional Deposit (as, if and when made) shall collectively be referred to herein as the "Deposit ". ... Seller and Purchaser have entered into a separate escrow agreement with Escrow Agent with respect to the Deposit.

(emphasis in original). Thus, the Agreement would terminate automatically if Megacenter did not provide the $ 750,000.00 Additional Deposit on or before the end of the "Inspection Period" as defined within the Agreement.

Paragraph 7 of the Agreement, which governs Megacenter's right to inspect the property, stated:

7. Inspection Period/AS IS Purchase . Purchaser shall have until 5:00 p.m. on the forty-fifth (45th) day following the Effective Date (the "Inspection Period") to make such physical, structural, legal, zoning, title, survey, land use, environmental, topographical and other examinations, inspections and investigations of the Property which Purchaser, in Purchaser's sole discretion has determined to make. In the event Purchaser is not satisfied with the Property, in Purchaser's sole discretion, Purchaser may cancel this transaction by written notice of cancellation given to both Seller and the Escrow Agent prior to the expiration of the Inspection Period, in which event, the Escrow Agent shall return the Deposit and all interest earned thereon to Purchaser, whereupon both parties shall be released from all further obligations under this Agreement except those that expressly survive. In the event Purchaser has not so timely delivered written notice of cancellation, then the foregoing condition precedent shall automatically be deemed to be satisfied in full and Purchaser's right of termination shall be deemed waived. ... In electing to enter into this Agreement, Purchaser shall purchase the Property in its "AS IS" condition and situation as of the Effective Date, including the physical, legal, and environmental condition and status of the Property. Purchaser expressly agrees that the Property will be conveyed by Seller without any representations, warranties or guarantees of any nature whatsoever, express or implied, except to the extent of any representations expressly set forth herein or in any document delivered by Seller in connection with the Closing. ... The provisions of this paragraph shall survive Closing and the early termination of this Agreement.

Accordingly, this provision allowed Megacenter to terminate the Agreement, at Megacenter's sole discretion, if it was not satisfied with the subject property, by providing written notice of cancellation to Goodman by the end of the inspection period.

Paragraph 17 of the Agreement addressed "Notices" and stated:

17. Notices . Any notices required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if delivered (i) by registered or certified mail, return receipt requested, postage prepaid, (ii) by hand delivery, (iii) by recognized overnight courier (such as Federal Express), or (iv) by facsimile with confirmed receipt, and addressed as follows: ..."

The Agreement stated that notices to the seller must be sent to Goodman's physical address with a copy to its counsel. Paragraph 17 further noted:

Notice shall be deemed given when delivered or upon refusal to accept delivery, and may be given on behalf of any party by its respective counsel. A copy of any written notice sent by either party to the other shall also be sent to all parties above via electronic mail at the addresses set forth above simultaneously with the sending of such notice via the delivery methods described above.

Under the Agreement, the "Inspection Period" expired at 5:00 p.m. on March 13, 2017. On Friday, March 10, 2017, the last business day before the expiration of the inspection period, Megacenter still did not know if the City would permit the property to be used as a self-storage facility. Megacenter thus requested an extension of the inspection deadline. Consequently, Megacenter and Goodman executed the "First Modification to Purchase and Sale Agreement." This First Modification extended the Inspection Period by four extra days, so the deadline was now March 17, 2017 at 5:00 p.m., allowing Megacenter the additional time to obtain the zoning letter from the City. The First Modification stated:

Seller has agreed to extend the Inspection Period until 5:00 PM on March 17, 2017 to permit Purchaser the opportunity to obtain the Zoning Letter". [sic] If Purchaser is unable to obtain a Zoning Letter that is reasonably satisfactory to Purchaser and provides evidence of such rejection to Seller, Purchaser shall have the right to terminate the Agreement during the Inspection Period pursuant to the provisions of Section 7 of the Original Agreement.

The First Modification further stated: "Purchaser has requested an extension to the Inspection Period for the sole purpose of obtaining Zoning Letter[.]" The First Modification also outlined that "[i]n the event of inconsistency between the provisions of this Modification and the provisions of the Original Agreement, the terms of this Modification shall govern and control." The First Modification provided: "Except as hereby modified, all of the provisions of the Original Agreement are hereby ratified and confirmed and shall be and remain in full force and effect, and the same are enforceable in accordance with their terms."

It is undisputed that on March 17, 2017, at 4:23p.m., Megacenter representative Pablo Wichman emailed Goodman's counsel, Joseph Hernandez, Esq., advising Goodman that Megacenter had not received the zoning letter from the City. The email further notified Goodman that if Megacenter did not receive a signed second modification to the Agreement by 5:00 p.m. that day, then Megacenter would terminate the Agreement. The email contained an attachment, a proposed "Second Modification to Purchase and Sale Agreement" to extend the deadline to March 22, 2017. Mr. Wichman stated in the email: "I apologize for the short notice, but if we have not received a response by 5 PM we will terminate the contract with the firm intention to reinstate once we receive the letter." Neither Goodman nor his coun...